96/01335 Analyzing the oil refining industry in developing countries: A comparative study of China and India

Abstract

The oil refining industry is a critical link in the energy chain in many developing and industrialized countries, transforming crude oil into transport fuels (gasoline, jet fuel, and diesel), residual fuel oil (widely used as a fuel in industry and the electric power sector), and other products such as kerosine, frequently for lighting an cooking usages. Three to four decades ago, the demand for oil products in most developing countries was centered to a few large cities; thus, few refineries were built in these regions. But because of the astonishing economic growth in many developing nations, demand for oil products has increased rapidly. As a result, the refining industry has expanded rapidly in such countries, even in cases were there is no domestic crude oil production. Oil product demand and refinery expansion in Asian developing countries in particular have experienced significant growth. Between 1976 and 1993, oil product demand and refinery capacity in that region (excluding Japan) increased annually an average of 5.2 percent and 4.3 percent, respectively, whereas the comparable figures for the world as a whole remained virtually unchanged during the same period. The substantial gains in Asia`s crude oil production in the 1970s is believed to havemore » facilitated this refinery expansion.« less